Commercial Applications that use Google API Accepted by Google

One of the biggest gray areas for me and many people out there is how can or can't they use the Google API. Recently, Danny Sullivan wrote (password required), "Google's API service isn't aimed to help people build commercial services. But Google Alert sees a business in using the API for tracking Google results. This story suggests it may have cut a deal with Google to share revenues when paid-for services are offered. Google Alert's Gideon Greenspan tells me this: "Google has agreed and encouraged us to begin charging for a premium service using the high-volume API key that they have supplied, but we haven't signed anything yet. As the premium service grows, the key capacity will need to be increased, and we'll enter discussions about specific business terms."

I know that Google doesn't want anyone to sell the results from the Google API. Where it gets gray is when you don't sell the results, but you sell the services around the results but give the results away for free. See the difference. What are your thoughts?